On Stocks and the Costanza Paradox

George Costanza: “My life is the opposite of everything I want it to be. Every instinct I have, in every part of life, be it something to wear, something to eat … It’s all been wrong.”

In a classic episode of Seinfeld called The Opposite, perma-loser George Costanza comes to the realization that if he would just act completely contrarily to his own instincts, things would begin to go his way.

Jerry Seinfeld: “If every instinct you have is wrong, then the opposite would have to be right.”

One cannot help but see the parallels between George’s epiphany and the paradox of the high beta market rally that has left even the most experienced players in utter disbelief.

Think about how rewarding it’s been for traders who have completely violated any sense of prudence or market savvy:

*AIG ($AIG) barely avoids liquidation – buy it and enjoy percentage gains in the thousands!

*Unemployment remains at around 10%, inital jobless claims are still climbing – so buy some specialty or even luxury retailers!

*Mortgage rates are inching higher and housing has not truly bottomed – so snag some Hovnanian ($HOV), some lumber names and why not a little Home Depot ($HD).

*Oil breaks out above $85 – and the airlines go wild!

*Congress passes a de facto takeover of Healthcare – OMG!  Healthcare stocks are rallying on the news of their newly subjugated status!

*Commercial RE is a time bomb – REITs!  I gotta have more REITs!

We can document dozens of these types of paradoxical setups.  Investors are taking almost any opportunity to do the opposite of what they’d normally be expected to do.  If everyone in the market is a contrarian, is the true contrarian the non-contrarian?  Heh – “Whaaaaat is the deeeeaal with contrarians?”  Thanks, Jerry.

If Georgie was running a hedge fund right now and abiding by his counterintuitive life strategy, he’d be absolutely killing it.

George Costanza: “I tell you this, something is happening in my life. it’s all happening because I’m completely ignoring every urge towards common sense and good judgment I’ve ever had. This is no longer just some crazy notion. Jerry, this is my religion!”

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

What's been said:

Discussions found on the web
  1. طلای سفید commented on Aug 07

    خرید طلا

    Appreciating the time and effort you set into your site and detailed info you provide. It is wonderful to appear throughout a site every single as soon as in a even though that is not the identical unwelcome rehashed data. Great read! I’ve saved your w…

  2. xxx maduras commented on Aug 07

    xxx maduras

    […]The information and facts talked about inside the report are a number of the ideal offered […]

  3. سكس اون لاين commented on Aug 07

    سكس اون لاين

    […]please visit the sites we adhere to, like this one, because it represents our picks through the web[…]

  4. pc apps for windows 7 commented on Aug 08

    pc apps for windows 7

    […]please check out the internet sites we comply with, such as this one, as it represents our picks from the web[…]

  5. گوشواره ماه commented on Aug 13

    خرید طلا

    1 was developed only for showing seconds and tiny while a various a single using moment graduations is created for implying several hours.

  6. Interracial Porn commented on Aug 13

    Interracial Porn

    […]check beneath, are some totally unrelated web-sites to ours, on the other hand, they may be most trustworthy sources that we use[…]

  7. هپاش commented on Aug 13

    مه پاش

    Hello there! Do you know if they make any plugins to help with Search engine marketing? I’m making an attempt to get my site to rank for some specific key phrases but I’m not observing extremely very good gains. If you know of any make sure you share.…

  8. دوربین مدار بسته commented on Aug 13

    دوربین

    Thanks for yet another informative net web site. The area else could I get that sort of info created in such an best method?I have a undertaking that I’m just now managing on, and I have been at the search outfor such info.

  9. dog memorial commented on Aug 13

    dog memorial

    […]just beneath, are numerous absolutely not associated websites to ours, on the other hand, they may be certainly worth going over[…]

  10. دوربین مدار بسته commented on Aug 14

    دوربین

    Hey, I think your website may well be getting browser compatibility issues. When I look at your blog in Chrome, it seems fine but when opening in World wide web Explorer, it has some overlapping. I just desired to give you a quick heads up! Other then…

  11. jewelry commented on Aug 14

    jewelry

    […]The info mentioned inside the write-up are a number of the ideal offered […]

Read this next.